At a Monday press conference at Ivaco Rolling Mills in l’Orignal, Ont., Pierre Poilievre insisted steel and aluminum companies will be clobbered if they pay the industrial carbon price alongside President Donald Trump’s 25-per-cent tariff on aluminum and steel.Adrian Wyld/The Canadian Press
The signs still work. Phew.
Conservative Leader Pierre Poilievre put a lot of work into that “axe the tax” slogan, and there was no way he wanted to waste a rhyme.
Prime Minister Mark Carney announced after he was sworn in on Friday that he would kill the federal fuel charge – the consumer carbon levy that has raised so many seething complaints. So you might think that “axe the tax” slogan would be destined for the trash heap. Not so.
On Monday, Mr. Poilievre moved quickly to promise he would axe another carbon levy: the industrial carbon levy, also known as the Output Based Pricing System.
It’s not quite as edgy to axe this particular tax because not many people know it even exists, it doesn’t collect a lot of money and it hasn’t attracted the same kind of vitriolic political angst as the consumer levy.
Poilievre says he’ll scrap carbon pricing on industrial emitters and consumers if elected
It’s also the low-cost way to reduce emissions. Searching for a tax to axe, Mr. Poilievre picked the wrong one. Oh well. Facing a new opponent, he rushed to react.
For two years, the Conservative Leader steadfastly refused to say whether he would also kill the industrial carbon-price program. But Mr. Poilievre had promised a “carbon tax election” nearly every day for a long, long time, so by golly he wasn’t going to let Mr. Carney kill that dream.
It wasn’t really a last-minute decision. The Conservatives decided months ago they’d propose to cancel the industrial carbon price so voters would not think they were anything but 100 per cent against carbon levies. By the time it was announced, it looked like Mr. Poilievre was just trying to one-up Mr. Carney.
The Conservative Leader did try to tie his new position to the new dominant issue – U.S. President Donald Trump’s trade war – by arguing it will hurt the competitiveness of Canadian industry.
At a Monday press conference at Ivaco Rolling Mills in l’Orignal, Ont., Mr. Poilievre insisted steel and aluminum companies will be clobbered if they pay the industrial carbon price alongside Mr. Trump’s 25-per-cent tariff on aluminum and steel.
But the proportions are vastly different. The tariffs are big. The industrial carbon price is small – unless you are an unusually big polluter compared with others in the same sector.
Certainly, companies hit by tariffs could be helped by any kind of tax reduction, but not just carbon levies.
Industrial carbon pricing does most of the heavy lifting in emissions reductions, but because of the way it is structured, it doesn’t cost industry a lot of cash.
On oil, it’s about 30 cents on a barrel that on average brings in a $40 profit, according to Dave Sawyer, the principal economist at the Canadian Climate Institute. Most provinces have their own version; only Manitoba, Prince Edward Island, Yukon and Nunavut use the federal system.
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Generally, the pricing systems set an emissions target for large polluters in a sector. A company with high emissions pays a price per tonne, and a company with low emissions earns a credit they can sell. Companies don’t pay the price on all their emissions, only the emissions that exceed a set bar, so the total cost is kept down. And emitters can buy credits at a pretty low price.
Those credits provide incentives to reduce emissions. And according to Mr. Sawyer, Alberta companies are sitting on about $5-billion worth, which presumably would disappear with the industrial carbon price.
Of course, the Conservatives can still scrap the whole business. Public zeal for reducing emissions has fallen. Mr. Poilievre indicated on Monday that he has no interest in setting a target for cutting Canada’s emissions.
Mr. Carney, at a Monday press conference in London after his meeting with British Prime Minister Keir Starmer, argued that Mr. Poilievre’s proposal is short-sighted at a time when Canada is seeking to diversify its trade beyond the U.S. He noted that the European Union already has a border carbon tariff on goods, and that industrial pricing mitigates the cost.
That kind of wonkery won’t be the big issue in the imminent federal election campaign, anyway. Climate change won’t be either. Yet the Conservatives know some people will remain angry about the consumer carbon levy even after it is gone. Now they can still use the signs.